Rules for Debt Relief may be Made Easier

It appears that new rules and regulations may be put into place to allow UK residents that have pensions to use debt relief orders in order to fight back and rid themselves of their insolvency. Business departments around the UK are coming up with certain changes that can be made to DROs that would make them more easily accessible for people so that they do not always have to turn to bankruptcy or individual voluntary agreements.

Debt relief order rules can allow people to rid themselves off a lot of debt within as little as a year, but people cannot use them if they have any assets that are more than 300 pounds in value. This means that at the moment it is hard for anyone with a pension fund to access a DRO, but that may all change soon.

Although these DROs were only introduced in April, there is already a plan for a new common sense change that would allow easier rules and let people with pension funds still take advantage of their benefits. Essentially these debt relief rules target people that have less than 50 pounds of excess income each month and have debt that is lower than 15,000 pounds. 12,000 people have used these DROs since they have been put into place and the government is trying to find a way for more people to use them.

The only discussion right now is how to determine how big of a pension pot should be before people are not allowed into the process, and where to draw the lines. There has been a lot of concern that people were getting denied for these rules even though they met all the criteria, and reports showed that 96% of people were excluded from the DRO process based on their pension. And in 78% of those cases the citizens pension funds were less than 5,000 pounds.